“We understand that nonprofits operate in a resource-constrained environment, and by nature are short on time and resources.” I received this marketing message yesterday from an organization serving nonprofits. For me, it epitomized the negative self-talk of the nonprofit sector. Zig Ziglar used to call it “stinkin’ thinkin’.”
Attitude is Everything
The assumption here is that nonprofits operate in a different realm than for-profit businesses — that their struggles are different. Well, I see plenty of for-profit companies starving, and I see plenty of nonprofits with a healthy business profile.
Some whine about how tough it is to raise money, pay staff fairly, buy new technology — even to survive. I hear for-profit business owners do the same thing. They blame their struggles on government regulations, unreasonable customers, and dishonest employees who don’t want to work.
Business is tough, whether you’re a for-profit or nonprofit. Accept it.
How We Communicate
Dan Pallotta has eloquently observed the double standard we apply in comparing nonprofit and for-profit organizations. Online discussion groups actively debate whether the solution may be found in referring to the nonprofit sector by a different name (e.g., social profit, for purpose, social purpose, public benefit, community benefit, social enterprise, etc.). While I maintain an open mind to the “what’s-in-a-name” debate, I also think we’re ignoring the elephant in the room. Public perceptions of nonprofits are most influenced by nonprofits themselves. It’s a function of how we communicate with staff, grant makers, contributors, volunteers, government, and the media. Often, it’s our own stinkin’ thinkin’ that works against us.
A well-funded nonprofit communicates as well as the most successful for-profit company. This is no accident; nor is it simply good fortune. Leadership has structured these organizations to pay people well, to have sufficient technology to efficiently accomplish their objectives, and to have a workspace that is conducive to how they want to be perceived by the public. They understand the need for cash reserves. They understand the cost of “doing business,” and their message is about impact, not the low level of overhead.
How We Operate
The Nonprofit Starvation Cycle has been well-documented. Nonprofits that don’t devote sufficient portions of their budgets to overhead will starve. Too many are hunkered down in the cycle and don’t know how to get out.
True leaders don’t blame their problems on external forces, whether it’s a poor economy, stubborn funders, or board members who don’t bring in enough money. They structure their organizations to succeed. That may mean spending less money on programs and more on infrastructure. For many, it’s unthinkable. But the strategy of “we’ll-pay-people-more-when-we-raise-more-money” never seems to get us there.
It’s time we change our stinkin’ thinkin’ and take action to fix our problems.
Dan Weiss, founder and President of Counterpart CFO, leads a team of flexible, part-time CFOs specializing in nonprofits. To read more from Dan, follow him on LinkedIn or subscribe to his blog at www.counterpartCFO.com.